Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 13, Problem 13P
Summary Introduction

Interpretation: The estimated transportation cost should be calculated considering its association with the optimal allocation pattern.

Concept Introduction: Decision making is a process of determining the alternative option to a given situation. It reaches the most suitable option for action. During decision making, the factors and some uncertainties are taken to consider.

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The Thor International Company operates four factories that ship products to five warehouses. The shipping costs, requirements, and capacities are shown in Figure. Use the transportation method to find the shipping schedule that minimizes shipping cost.
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In May 2023, several empty containers, totaling 20 containers, need to be reallocated among terminals in Amsterdam, Berlin, Munich, Paris, Milan, Barcelona, and Madrid. The available or requested number of empty containers at various terminals is reported, along with the transportation costs (in euros per container) as seen in Figure 1.Determine how to solve the problem with the goal of minimizing transportation costs.Note: "+" denotes supply nodes, and "-" denotes demand nodes.Arrows depict the flow of material and costs.Please provide the mathematical explanation used to solve the question above.
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